Roger Alberto Santamaria Del Cid, an apparent nominee director for offshore companies who is listed as a corporate “subscriber” for VX Gateway in Panamanian business records, is referenced at least three times in the “Panama Papers.”
VX is a payment processor for the MyAdvertisingPays (MAPS) cross-border scheme that touts Anguilla registration after earlier operating from the U.S. state of Mississippi. MAPS purportedly pulled out of the United States last year, potentially leaving thousands of American affiliates expecting payouts holding the bag.
In April 2015, the PP Blog reported that MAPs, a purported “advertising” program similar to the AdSurfDaily Ponzi scheme, was trading on the name of President Obama after ASD previously had traded on the name of President George W. Bush. MAPS is known to have members in common with the judicially declared TelexFree Ponzi- and pyramid scheme, which also traded on the names of government officials.
It is somewhat common in the HYIP sphere for “programs” and their affiliates to drive traffic to schemes by suggesting the endorsement of government agencies or prominent government officials.
TelexFree, which may have generated $3 billion in illicit cross-border business, collapsed in 2014.
The Facebook site for the TaraTalksBlog, a MAPS critic, reported on May 7 that it had received “numerous reports that MAP has closed members accounts, with no redress, after members have requested payment withdrawals.”
In short, non-U.S. affiliates of MAPs also may be having trouble getting paid.
Then-Deputy U.S. Attorney General James Cole also said (bolding added):
“Because of the sophistication of the world economy, organized crime groups have developed an ability to exploit legitimate actors and their skills in order to further the criminal enterprises. For example, transnational organized criminal groups often rely on lawyers to facilitate illicit transactions. These lawyers create shell companies, open offshore bank accounts in the names of those shell companies, and launder criminal proceeds through trust accounts. Other lawyers working for organized crime figures bring frivolous libel cases against individuals who expose their criminal activities.”
As noted above, the Panama Papers database shows Del Cid’s name at least three times. On April 14, the PP Blog reported (italics added):
Del Cid’s name has appeared on the PP Blog a couple of times. On Feb. 8, 2011, the Blog reported that his name had appeared in court filings in a federal forfeiture case involving assets linked to the notorious EMG/Finanzas Forex scheme in the Middle District of Florida. (See Paragraph 10 of this affidavit by a Task Force investigator.)
Money from EMG/Finanzas was linked to the international narcotics trade. OpenCorporates lists del Cid here as a Finanzas “subscriber.” The site lists Tatiana Itzel Saldaöa Escobar as another Finanzas subscriber, and the same name appears alongside Del Cid as a VX subscriber.
New court filings in Canada by the receiver and liquidators in the Banners Broker case now estimate the total haul of the alleged double-your-money pyramid scam at more than $156 million. That’s up from an earlier estimate by Toronto police of $93 million. If the $156 million figure proves correct, it would make Banners Broker a bigger fraud than the $119 million AdSurfDaily Ponzi scheme broken up by the U.S. Secret Service in 2008.
Like MAPS, which currently is operating, ASD and Banners Broker purported to be “advertising” companies. The ASD case threw down the gauntlet on securities companies trying to evade the law by pretending to be “advertising” firms.
But the apparent upstaging of ASD by Banners Broker in dollar volume in the purported “advertising” trade is not the only news.
Rajiv Dixit, one of the Banners Broker figures who helped put Stepsys in the position of getting rich from online fraud schemes, was arrested in Canada in December 2015.
Filings April 4 by the receiver and liquidators in the case show that Dixit may be trying to use “sovereign citizen” courtroom tactics against them in Canadian proceedings. In the United States, AdSurfDaily figure Kenneth Wayne Leaming tried the same thing in that case.
The Banners Broker receiver and liquidators have reported Dixit’s alleged activities to the court.
Specifically, they say Dixit, who calls himself “the man master rajiv of the family dixit” [sic] and his targets “interlopers,” is trying to foist a bogus “Cease and Desist” order on them that threatens a fine of $36 per second if they don’t back off from their judicially mandated duties. Dixit apparently wants to be paid in “silver dollars.”
From the receiver/liquidators (italics added):
The Cease and Desist Notices go on to state that if the Court Officers and their counsel do not cease and desist “all actions and claims against Mr. Rajiv Dixit and or Rajiv Dixit forthwith” Dixit will invoice them $47,304,000.00 silver dollars “[p]lus, for each second starting at 12:00:01 AM until the cease and desist is complied with, each Respondent will be charged an additional $36.000 per second.”
Court filings in other cross-border cases — including Zeek Rewards and DFRF Enterprises — have signaled that “sovereigns” also were involved in those schemes.
With Banners Broker, Dixit called his affiliates “stupid,” according to the new filings by the receiver and liquidators.
8TH UPDATE 11:53 P.M. EDT U.S.A. Before we get to the news that a federal judge took only a day to dismiss an April 6 libel lawsuit filed by the MyAdvertisingPays (MAPS) scheme and operator Michael E. Deese against the TaraTalks Blog, we’ll note that the 16-page complaint confirms that MAPS is incorporated in Anguilla.
Anguilla is a British overseas territory in the Caribbean. It is not illegal to incorporate offshore, but some schemes do so to avoid taxes or to engage in money-laundering and other crimes. There has been a longstanding concern that narcotics traffickers and even terrorists are using corporate shells to hide a criminal agenda.
Class-action attorneys in the United States pursuing claims in the massive TelexFree fraud scheme operating from Brazil, the United States and other countries have called MAPS a Ponzi scheme and promoter Simon Stepsys a “Ponzi mogul.”
Only days before the filing of the MAPS lawsuit and nearly instant dismissal, news of the “Panama Papers” and a giant leak to reporters broke through the International Consortium of Investigative Journalists. Anguilla was mentioned prominently as a tax haven. MAPS, originally incorporated in Mississippi, has been touting its Anguilla connection for months.
MAPS, for two years, also has been touting its relationship with an e-wallet vendor known as VX Gateway that operates out of Panama. Here’s where things really get interesting.
VX lists Roger Alberto Santamaria del Cid as a “subscriber.” Del Cid’s name has appeared on the PP Blog a couple of times. On Feb. 8, 2011, the Blog reported that his name had appeared in court filings in a federal forfeiture case involving assets linked to the notorious EMG/Finanzas Forex scheme in the Middle District of Florida. (See Paragraph 10 of this affidavit by a Task Force investigator.)
Money from EMG/Finanzas was linked to the international narcotics trade. OpenCorporates lists del Cid here as a Finanzas “subscriber.” The site lists Tatiana Itzel Saldaöa Escobar as another Finanzas subscriber, and the same name appears alongside Del Cid as a VX subscriber.
Del Cid apparently works as a nominee director of offshore companies with ties to Panama. (See April 7, 2013 story that mentions his name on the website of the International Consortium of Investigative Journalists: “Faux Corporate Directors Stand in for Fraudsters, Despots and Spies.”
The judge tossed the complaint in 24 hours, finding the court did not have jurisdiction, according to BehindMLM.com, another MAPS critic.
TaraTalks, which calls MAPS a Ponzi scheme, operates on Google’s Blogger platform, but MAPS apparently can’t pin down the precise location. Nor can MAPS identify the author of TaraTalks and the author’s location. All three things are important for establishing diversity jurisdiction.
But the complaint may have another jurisdiction issue. Although it says plaintiff Deese lives in “Harrison County, Louisiana,” no such place exists. Louisiana does not have counties; it has parishes, and there is no Harrison Parish.
Whether MAPS is under investigation by any U.S. government agencies is unknown. Similar schemes have led to prosecutions, and references by class-action attorneys to MAPS potentially put it on the U.S. radar.
“These frauds are easily duplicated, and at times, we find ourselves playing ‘whack-a-mole,’ chasing the same set of fraudsters who, after feeling a bit of heat, simply close down one scheme and quickly set up a new one under a different name.” — Andrew Ceresney, SEC Enforcement Division director, March 2, 2016
EDITOR’S NOTE: Type “whack-a-mole” into the PP Blog’s search box near the upper-right corner to find our stories that touch on frauds rising to replace other frauds. Examples include so-called “programs” that claim to be “advertising” companies or to have an “advertising” component — for example, Zeek Rewards, TelexFree, Banners Broker and AdSurfDaily. If you’re in an “advertising” program such as MyAdvertisingPays (MAPS) or TrafficMonsoon, you should asking some serious questions and thinking about whether serial fraudsters are whacking you.
When one scheme collapses, another quickly rises to replace it. Many such schemes operate simultaneously, drafting the unwary into multiple miseries. Ill-gotten gains or losses pile up in the billions of dollars. Yes, billions.
Of course, “whack-a-mole” is not limited to “advertising” schemes. There are “cycler” schemes such as “The Achieve Community” and its Ponzi-board equivalents. Meanwhile, there are HYIP schemes such as “Profitable Sunrise” and its Ponzi-board equivalents. MoneyMakerGroup and TalkGold are examples of Ponzi boards. The scammers now have added social media such as YouTube, Facebook and Twitter to their arsenal. Vulnerable people and population groups are constant targets.
Scams such as WCM777 that claim to have a “product” also are part of “whack-a-mole.”
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Let’s begin by encouraging you to read Andrew Ceresney’s opening remarks at a joint symposium today sponsored by the SEC and the University of Illinois at Chicago. (Link at bottom of story. Also see Twitter links.)
Ceresney is the SEC’s director of enforcement. One of the things the PP Blog noted while reading the text of his remarks is that it included a subhead titled “Pyramid Schemes and Multi-Level Marketing.”
SEC’s Ceresney: Pyramid schemes are attacks on retail investors, often target working class, immigrant communities https://t.co/bq7lZOw4nG
This reflected on ongoing effort by the SEC to educate the public that the presence of a “product” in a scheme does not necessarily mean no scam is under way. Many MLMers erroneously believe that a “product” (or purported one) offered for sale cures all ills. That is simply not the case. A year ago in Congressional testimony, the director spoke about a “coordinated effort” to disrupt pyramid schemes.
Ceresney today provided more details on a new Task Force that is combating pyramid fraud. Here is part of his remarks (italics/bolding added):
After seeing an increase in complaints regarding pyramid schemes and affinity fraud, the SEC formed a nationwide Pyramid Scheme Task Force in June 2014 to provide a disciplined approach to halting the momentum of illegal pyramid scheme activities in the United States. The goal of the Task Force is to target these schemes by aggressively enforcing existing securities laws and increasing public awareness of this activity.
The Division is deploying resources to disrupt these schemes through a coordinated effort of timely, aggressive enforcement actions along with community outreach and investor education. More than fifty SEC staff members are part of the nationwide Task Force, which is enhancing its enforcement reach by collaborating with other agencies and law enforcement authorities. We are also using new analytic techniques to identify patterns and common threads, thereby permitting earlier detection of potential fraudulent schemes.
Collaboration with other regulators, including criminal authorities, is an important goal of the Task Force. To advance this goal, the Task Force has hosted an interagency summit attended by over 200 representatives from other federal and state agencies and has presented at local trainings and agency-specific conferences. And, of course, we have partnered with other regulators and criminal authorities to bring high-impact actions in this space. For example, one month after we filed our enforcement action against the operators of the TelexFree pyramid scheme, two of TelexFree’s principals were charged by the criminal authorities.
Will the “program” you’re currently pitching become the subject of a “high-impact action?” Time will tell.
In 11 SEC actions since 2012 involving pyramid operators, the damage resulted in ill-gotten gains or losses totaling more than $4.2 billion, Ceresney said today.
BULLETIN: (6th update 7:23 p.m. ET U.S.A.) Class-action lawyers pursuing claims against TelexFree promoters have called the My Advertising Pays (MAPS) “program” a Ponzi scheme and described MAPS promoter Simon Stepsys as a “Ponzi mogul.”
The case itself is not against MAPs. Even so, the lawyers now have made repeated references to MAPs and are lambasting the serial promotion of MLM fraud schemes. The newest reference to MAPS occurred in federal court filings in Massachusetts today. As the PP Blog reported last year, MAPS initially was mentioned in a proposed TelexFree-related class action filed in the Southern District of New York in December 2014.
Daniil Shoyfer, an alleged promoter of TelexFree, plowed nearly $9,000 into MAPS a month after TelexFree filed bankruptcy in April 2014, according to attorney Alexander D. Wall. Shoyfer promptly was heralded by Stepsys, Wall contended.
Stepsys, Wall alleged, “is an Internet Ponzi scheme mogul” currently promoting MAPS. He previously promoted the bizarre Banners Broker scheme that led to two arrests in Canada last month.
Moving from one fraud scheme to another is a serious problem in MLM.
A Stepsys-connected website includes “a paragraph, together with a photograph of Defendant Daniil Shoyfer, congratulating Mr. Shoyfer for reaching the ‘1200 Diamond level’ for his promotion of the MyAdvertisingPays scam,” Wall alleged.
“This webpage also indicates that in May 2014 – the month following TelexFree’s declaration of bankruptcy – Mr. Shoyfer purchased ‘177 Credit Packs’ from MyAdvertisingPays. Upon information and belief, as well as research I have performed, [a] MyAdvertisingPays ‘Credit Pack’ costs $49.99,” Wall alleged. “Thus, Mr. Shoyfer invested at least $8,848.23 in a second Ponzi scheme in the month after TelexFree’s bankruptcy filing.”
The class-action lawyers have been seeking a preliminary injunction against Shoyfer and an asset freeze that would prohibit dissipation of assets. Shoyfer has contended he believed TelexFree was legal and that there is a vendetta against him.
BULLETIN: (14th Update 3:39 p.m. ET U.S.A.) Toronto police have arrested “Banners Broker” figures Christopher George Smith of Toronto and Rajiv Dixit of Vancouver.
Both suspects are 45 and are scheduled to make a court appearance today, police said. The scheme allegedly raised $93 million (U.S.).
They have been charged with Defrauding the Public of Over $5000, Possession of the Proceeds of Crime, Laundering the Proceeds of Crime, Operating a Pyramid-Selling Scheme and Making False or Misleading Representations under the Competition Act, police said.
“[T]here are 1000’s of victims worldwide in Banners Brokers pyramid scheme,” police said on Twitter. The remark was attributed to Det. Sgt. Ian Nichol of the Toronto Police Mass Marketing Section.
And, the department Tweeted, the agency and mass-marketing fraud investigators from the Royal Canadian Mounted Police “worked for 2yrs full time on Banners Brokers pyramid scheme investigation.”
Also assisting in the cross-border probe were the Competition Bureau of Canada, the Ministry of Government and Consumer Services, the Ministry of Finance, the U.S. Federal Trade Commission, FINTRAC and the Canada Revenue Agency, police said.
FINTRAC stands for the Financial Transactions and Reports Analysis Centre of Canada.
“[T]he program’s existence was entirely dependent upon the fee-based entry of new members and little or no real product or service was provided,” police said.
The PP Blog’s first reference to Banners Broker was published on June 17, 2012, when the Blog reported that a site that claimed it sold “customers” to Zeek Rewards members also was pushing traffic to Banners Broker and JSS Tripler/JustBeenPaid, the bizarre, 730-percent-a-year “program” purportedly operated by Frederick Mann.
Mann also was a pitchman for the AdSurfDaily Ponzi scheme. JSS/JBP, which later morphed into a “program” known as ProfitClicking, may have ties to the sovereign-citizens movement. Zeek allegedly was a Ponzi/pyramid scheme that gathered more than $850 million.
Some HYIP promoters move from scheme to scheme to scheme, creating a condition in which losses mount globally and banks become warehouses for fraud proceeds. The SEC yesterday announced charges against alleged Zeek promoter Trudy Gilmond, whom the agency alleged recruited members for multiple failed schemes.
From PP Blog archives: On April 2, a video depicting President Obama as a fan of the MyAdvertisingPays “program” appeared on YouTube. An “Obama voice” was dubbed into the video, which also shows the Presidential Seal. Text below the video reads, “Mr. President speaks about the new advertising revolution.”
“My AdvertisingPays pays its members every 20 minutes,” a mimicked voice of Obama said in the promo. “I highly recommend you to join MyAdvertisingPays.”
Like many things in network marketing, this was reckless beyond measure. MAPS, as it is known, is reminiscent of the AdSurfDaily Ponzi scheme broken up by the U.S. Secret Service in 2008. ASD, sued by some of its own members amid allegations of racketeering and described by the Secret Service as a “criminal enterprise,” thought it prudent to trade on the name of President George W. Bush to drive dollars to its $119 million scam.
It proved to be very imprudent for ASD to suggest a White House vetting and endorsement. The indictment against ASD operator Andy Bowdoin even referenced the bid to dupe members and prospects in this fashion . (Also see: “THE DAY ‘WINK-NOD’ DIED,” from the PP Blog on Dec. 2, 2010.)
MAPS Suddenly Says It Is Withdrawing From United States
After one or more MAPS’ promoters lifted footage of a Presidential address and used technology to put words in Obama’s mouth to help an MLM scheme spread its tentacles, it now has come to pass that MAPS — purportedly led by American Mike Deese of Mississippi via Anguilla, a British overseas territory — says it is pulling out of the United States.
In an announcement dated yesterday and titled “THE MOST IMPORTANT UPDATE EVER RELEASED,” MAPS more than hinted it is not wanted in America: “We are going to focus on the place where we are wanted and are making huge strides,” MAPS said.
That place is Europe, according to MAPS.
“The decision comes on the heels of a declining marketplace in the US for our company.,” MAPS said. “It simply isn’t profitable for us to remain engaged there. Over 90% of our business already comes from Europe, while we are catering to the US members by operating in US currency. It doesn’t make good business sense to continue operating in a place and expending valuable resources in a market that’s steadily declining.”
If MAPS is right — if it’s not wanted in America and if the U.S. market is steadily declining — we take this as good news that suggests MAPS perceives a serious threat from American law enforcement and class-action lawyers interested in suing under the federal RICO (racketeering) statute. Even so, it’s troubling that MAPS apparently sees a welcome mat for itself in Europe.
About 50,000 Spaniards reportedly got sucked into the TelexFree scheme. TelexFree pain, in fact, lingers across Europe and the world. It is possible that it affected 1 million people or more. MAPS currently brags that it has “209805+ Users.”
Like the other “programs,” MAPS now is planting the seed it is lining up people to sue.
From the MAPS Oct. 15 announcement (italics added):
On a different note, it has come to our attention that there exist multiple internet-based avenues being used for defamatory and libelous speech against MAP. Through our research, we have found many, if not all, of these claims to be without merit and simply an attempt by certain individuals to exploit the MAP name in order to heighten the popularity of their own product. MAP has served demand letters upon those individuals who engage in defamatory and slanderous rhetoric, and in anticipation of litigation, has prepared complaints against all such individuals. MAP would like to emphasize and reassure you that their decision to cease operations in the United States is in no way connected to the aforementioned defamation and libel claims.
Now, a year later, a member of the TelexFree MLM scheme shut down by the SEC and other agencies last year is telling a federal judge that it appears TelexFree engaged in accounting fraud that caused him to pay taxes on income he never actually received.
Unlike Zeek’s Paul Burks and Dawn Wright-Olivares, alleged TelexFree operators James Merrill and Carlos Wanzeler have not been charged criminally with tax offenses. But the assertion by Shoyfer gives rise to questions about whether they and others could be as the federal probe of the enterprise continues. Merrill and Wanzeler currently face charges of wire fraud.
Shoyfer, through attorneys from two Boston law firms, says U.S. District Judge Timothy S. Hillman should not permit the plaintiffs to amend the complaint to make him the class-representative. He further contends that “TelexFree has engaged in what appears to be fraudulent accounting practices intending to show that it paid Mr. Shoyfer in excess of $750,000 – however this is simply false.”
“Although TelexFree credited Mr. Shoyfer with large amounts to his TelexFree account, he never withdrew or had access to the vast majority of these funds,” he contended through counsel.
Shoyfer did not identify who might have helped TelexFree hatch a bogus accounting scheme. The SEC, in 2014, charged former TelexFree CFO Joseph H. Craft of Boonville, Ind., with securities fraud. Craft is an accountant. In its civil complaint, the SEC alleged Craft “has been the chief financial officer of other multi-level marketing companies” in addition to his work for TelexFree.
From Shoyfer’s argument (italics added/light editing performed):
Mr. Shoyfer worked with TelexFree from March of 2013 through April of 2014 . . . Over the course of those thirteen months, Mr. Shoyfer received a total of $122,000 from TelexFree . . . However, Shoyfer also spent many thousands of dollars in expenses in order to make this money from TelexFree . . . Mr. Shoyfer estimates that he paid nearly $60,000 to TelexFree in order to be a part of the MLM (including dozens of purchases of the $1,425 AdCentral Family packages, . . . plus other expenses . . . Contrary to the allegations in the proposed amended complaint, Shoyfer never earned $300,000 per week . . . Mr. Shoyfer cannot afford to be the class representative in this lawsuit: it would almost certainly bankrupt him (again), and it would work an immeasurable hardship on his wife, his daughter, his unborn daughter, his two sons, his father, his sister and others that depend on him.
The argument describes Shoyfer as a teenager when he fled the Soviet Union for America years ago with his mother to escape “persecution because of their Jewish heritage.”
Living in the United States, Shoyfer, now believed to be in his forties, eventually became a full-time occupational therapist who started a staffing business in that profession and also dabbled in MLM, according to the argument.
Shoyfer asserts that he believed TelexFree to be legitimate.
“Prior to TelexFree closing down and being charged with fraudulent acts, Mr. Shoyfer had no knowledge that TelexFree was engaged in any unlawful, unfair, or improper practices,” his lawyers argued. “To the contrary, Mr. Shoyfer relied upon the statements of TelexFree’s officers and legal representatives that TelexFree was a fully legitimate and legal enterprise . . . Mr. Shoyfer had no reason to believe otherwise (nor did he) until TelexFree and its officers were charged.”
More from the argument (italics added/light editing performed):
The defense costs Mr. Shoyfer would have to absorb as the named defendant for the putative defendant class would easily exceed the amounts he received from TelexFree and he, therefore, has no incentive to pay the defense costs of being the named defendant . . . If a defendant class is certified, Mr. Shoyfer intends to opt out of the class . . . Mr. Shoyfer has no interest in being lumped together with 20,000 or so other defendants, some of whom may have known more than he did about TelexFree’s activities and the purported pyramid scheme, and some of whom liked caused Mr. Shoyfer to suffer damages himself.
The argument further contends Shoyfer is a good son and sibling who sends between $200 and $300 each month to both his father in Russia and his sister in Lithuania. He also has paid support of about $2,000 a month since 2008 for two children from his first marriage. Shoyfer now has a child with his second wife, with another child on the way.
In June 2015, The PP Blog reported that Shoyfer also was promoting a scheme known as MyAdvertisingPays — or MAPS, for short. MAPS resembles the AdSurfDaily Ponzi scheme, a $119 million fraud uncovered by the U.S. Secret Service in 2008.
Kenneth D. Bell, the Zeek receiver, has raised questions about MLMers moving from one fraud scheme to another.
BULLETIN: Class-action attorney Robert J. Bonsignore has asked a federal judge for permission to file a third amended consolidated complaint that effectively would sue at least 20,000 “net winners” in the TelexFree scheme shut down by the SEC last year.
The proposal would name alleged TelexFree promoter Daniil Shoyfer the lead class-action defendant, effectively making him the Todd Disner of TelexFree-related court actions. Disner is a Zeek Rewards figure sued by Zeek receiver Kenneth D. Bell in clawback actions aimed at more than 9,000 alleged winners in the Zeek scheme shuttered by the SEC in 2012.
Disner also promoted the AdSurfDaily Ponzi scheme broken up by the U.S. Secret Service in 2008.
The PP Blog reported in June 2015 that Shoyfer also was promoting a scheme known as MyAdvertisingPays — or MAPS, for short.
If the judge approves the proposal by Bonsignore, it would appear to mark the first time alleged TelexFree winners have been targeted en masse for the return of their alleged winnings from a scheme the SEC has described as a massive pyramid- and Ponzi fraud. Up to $1.8 billion flowed through TelexFree, now in the hands of a court-appointed trustee who has called it a pyramid scheme.
Web records showed that Shoyfer also was promoting MAPS alongside MAPS colleagues such as U.K. hucksters Simon Stepsys and Shaun Smith.
Bonsignore’s proposed amended complaint on the TelexFree front may lead to similar questions. At a minimum, the development highlights the dangers of fraud schemes that spread at least in part though the Internet to involve hundreds of thousands of participants. Victims can pile up in extraordinary numbers, and a fraction of participants who emerge as winners can end up confronting lawsuits and expensive, emotionally draining litigation.
MAPS, a purported advertising scheme similar to AdSurfDaily, continues to operate.
EDITOR’S NOTE: Certain reports by the PP Blog that are available to any person with an Internet connection are referenced in a consolidated, amended prospective class-action complaint that makes claims against various defendants with an alleged association with TelexFree. Information from other publicly available sites, including BehindMLM.com, RealScam.com and others, also is referenced.
The purpose of the PP Blog is to make information available to a wide audience interested in Ponzi schemes, pyramid schemes, securities-fraud schemes and concerns about the interconnectivity of such schemes. The Blog was not consulted about the inclusion of its links or quoted material from the Blog. Nor was the Blog compensated. The PP Blog has no association with the class-action attorneys, who obviously are readers of the Blog and the other online publications.
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Still promoting MLM HYIP schemes in the face of evidence they cause intractable financial, legal and emotional pain that sometimes mushrooms to involve hundreds of thousands of people?
On March 9, 2015, the PP Blog reported that the name of “MyAdvertisingPays” was referenced in a TelexFree-related proposed class-action lawsuit filed in U.S. District Court for the Southern District of New York in December 2014.
The filing appeared to mark the first time MyAdvertisingPays, known in shorthand as MAPS, was referenced in a federal-court filing.
History shows that such references are closely watched by law enforcement. Indeed, they sometimes serve as unofficial triggering actions and presage federal regulatory action by civil authorities such as the SEC and even actions by agencies empowered to enforce criminal laws.
When the California Department of Business Oversight was investigating the WCM777 scam in 2013, for instance, TelexFree’s name popped up in the context of the cross-promotion of MLM HYIP schemes.
This was months before it became known that the SEC and the U.S. Department of Homeland Security were investigating TelexFree, alleged to have gathered at least $1.6 billion in a combined pyramid- and Ponzi scheme.
Instead, the complaint alleged that TelexFree huckster Daniil Shoyfer was “the largest single Promoter” of TelexFree “in the greater New York area.” Web records showed that Shoyfer also was promoting MAPS alongside MAPS colleagues such as U.K. hucksters Simon Stepsys and Shaun Smith.
Willfully blind and supremely disingenuous MLM HYIP promoters moving from one cross-border fraud scheme to another has been a longtime problem. Such promoters may have little of their own money invested, but contribute to a condition under which banks and payment processors become warehouses for fraudulent proceeds cycling between and among scams.
New York is the financial center of the United States. The filing of the proposed TelexFree class action there contributed to questions about whether MAPS soon would be on the U.S. regulatory and enforcement radar.
The answer to that question remains unclear. What is clear is that the New York complaint was transferred to Massachusetts, the U.S. home base of TelexFree. And it’s also clear that Shoyfer has been named a defendant in an amended TelexFree class-action complaint filed April 30 in Massachusetts federal court.
Among the allegations against Shoyfer (italics added/light editing performed/formatting not precise):
TelexFree changed its compensation plan on or about March 9, 2014, much to the fury of affiliates, noted below. Shoyfer, however, continued to promote it unremittingly, sending group text messages to his network with such as the following:
Hey..my team Telexfree! ! And here we go again..Come to check out and learn about new compensation plan TF 2.0.. and how to grow it even faster and MUCH more aggressively and efficiently than the one we had before.…Here is this week’s schedule. . Monday 03/24 at Salon Delacqua (2027 86 str) at 8.00 pm (in English) ..Wednesday 03/26 at SOHO launch(2213 65th street) at 7.45 pm ( in Russian) and Thursday 03/27 at 7.30 pm at 63-112 Woodhaven Blvd in a real estate office. In my case, since I have started from absulute zero during this passed week Mon 03/17- Sun 03/23/14 I booked 11,500 from new one and 21,600 still coming from old plan..A total of 31,100 in 7 short days… Go Telex!!!
After the institution of the new TelexFree compensation plan in March 2014, Shoyfer took part in a closed meeting with TelexFree’s directors and owners in Marlborough, Massachusetts, at which Shoyfer was instructed not to discuss the new TelexFree compensation plan with others and non-insiders, as the new compensation plan was detrimental to Promoters and was adopted to forestall [TelexFree] filing bankruptcy.
So, a man who allegedly promoted TelexFree and had inside information detrimental to ordinary TelexFree affiliates allegedly kept it to himself, continued to promote the scheme — and then moved on to MAPS. This naturally leads to questions about whether Shoyfer has kept information from ordinary MAPS members.
Purpose Of The Amended TelexFree Class Action
The complaint is an effort to consolidate for the sake of efficiency various TelexFree-related class actions filed in various courts. Such actions were filed in multiple U.S. states.
But that’s not the only news: The amended complaint also names TelexFree pitchman Scott Miller a defendant alongside Shoyfer and HYIP huckster Faith Sloan. In documents prepared by Zeek receiver Kenneth D. Bell, Miller’s name appears as an alleged winner in the $897 million Zeek scheme.
In 2013, Miller promoted TelexFree through a publication known as Home Business Advertiser. Another advertiser promoted a cash-gifting scheme. A columnist described Jesus Christ as the person who inspired modern network marketers through his recruitment of 12 disciples.
A Semacon cash-counting machine appeared as a stage prop in a cash-gifting video advertised in Home Business Advertiser. The promos appeared after two women in Connecticut were sentenced to federal prison for their roles in a cash-gifting scheme and tax fraud.
Also named promoter-defendants in the amended TelexFree class action are Sanderley Rodrigues de Vasconcelos (Sann Rodrigues), a two-time SEC defendant in pyramid-scheme cases who allegedly also claimed his actions were inspired by a deity; Santiago de la Rosa; and Randy N. Crosby.
How the promoter-defendants will pay for their defenses in the amended class action is an open question. One of the risks of promoting such schemes is to be left totally on your own if the government or class-action attorneys file lawsuits.
Another open question is whether other shoes will drop in the government actions. The government probes are ongoing. Some of the class-action defendants conceivably could become defendants in amended or new actions filed by the SEC or agencies that have criminal enforcement power.
The amended TelexFree class action asserts fraud claims under Massachusetts law against a slew of defendants, including financial vendors and MLM attorney Gerald Nehra, also a figure in the the Zeek scheme and the AdSurfDaily Ponzi-scheme story. ASD was a $119 million Ponzi scheme broken up by the U.S. Secret Service in 2008. ASD operator Andy Bowdoin was sentenced to federal prison in 2012, after authorities tied him to at least two other cross-border fraud schemes: OneX and AdViewGlobal.
ASD’s name is referenced repeatedly in the amended TelexFree complaint, as is the name of Zeek. When the complaint will be heard is anyone’s guess. That’s because there are unresolved criminal matters against alleged TelexFree principals James Merrill and Carlos Wanzeler, both of whom are named defendants in the amended complaint and also are among the subjects of the SEC complaint.
Katia Wanzeler, Wanzeler’s wife, also is named a defendant in the amended complaint. So is TelexFree figure Joe Craft, another defendant in the SEC action. Brazilian TelexFree figure Carlos Costa also is named a defendant in the amended class action.
Also named a defendant in the amended class action is Jason “Jay” Borromei of Laguna Niguel, Calif. Along with a company known as Opt3, he is accused of “intentionally, knowingly, unfairly and deceptively set[ting] up TelexFree’s United States-based servers in Brazil with the intent of directly furthering, aiding or abetting their unlawful and fraudulent operation, including facilitating the placement of evidence of the Pyramid Scheme beyond the jurisdiction of the United States’ courts.”
With TelexFree itself in bankruptcy court, the class-action plaintiffs contend that “Opt3 and Borromei have a history of providing technical services within the multilevel marketing industry and hold themselves out as having related specialized knowledge. For example, Borromei previously served as chief information officer of Joystar, Inc., later renamed Travelstar, a multilevel marketing company that collapsed in approximately late 2008, and subsequently entered involuntary chapter 7 bankruptcy.”
Though not named a defendant in the amended class action, TelexFree and Zeek figure Tom More also is referenced in the 200-page complaint.
‘Private Jet’ Gets A Mention
On March 9, 2014, the PP Blog reported that a person who took the stage at a TelexFree rah-rah fest in Massachusetts asserted that TelexFree had access to a “private jet” that recently had ventured to the Dominican Republic and Haiti.
The “private jet” also was referenced in the class-action complaint. Details about it remain unclear.
At the moment, the April 30, 2015, amended and consolidated complaint is posted here at the website of class-action attorney Robert Bonsignore.
EDITOR’S NOTE: The interconnectivity of fraud schemes is one of the core dangers of the HYIP sphere. Stolen proceeds continually cycle between and among scams, making banks and payment vendors virtual warehouses for cross-border criminals and their serial enablers. The problem may be intensifying. More and more HYIP schemes appear to be using script kits — essentially prefabricated websites — in which emerging schemes simply plug in their information and graphics. These kits allow schemes to show ads for other schemes, including competitive schemes.
Simply put, modern scams are driving business to other modern scams.
As the story below illustrates, the cycle may not be broken even if a particular scheme suspends payouts.
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“Bring The Bacon Home,” a Ponzi-board “program” popularized in part by Achieve Community hucksters, reportedly has crumbled.
The circumstance surrounding the collapse, however, demonstrates that BTBH is contributing to ongoing harm. Indeed, the “program” continues to publish ads for other HYIP schemes, including “MyAdvertisingPays.”
MAPS, as it is known, is referenced in a prospective class-action complaint filed against multiple TelexFree figures and financial vendors in U.S. District Court for the Southern District of New York in December 2014.
TelexFree was alleged by the SEC last year to have been a combined pyramid and Ponzi scheme. The trustee in the TelexFree bankruptcy case says the cross-border “program” may have gathered as much as $1.8 billion.
TelexFree and MAPS are known to have had promoters in common. It was learned last month that Shaun Smith, an alleged “winner” in the Zeek Rewards scheme broken up by the SEC in 2012, also is promoting MAPS.
Despite the reported collapse of BTBH, it continues not only to publish ads for MAPS, but other schemes.
BTBH, which had claimed $40 turned into $1,800, encountered a failed launch in January. The “program” then embarked on a self-styled “relaunch,” but that, too, appears now to have failed — leaving investors holding the bag.
Another of the scams currently advertised on BTBH is “MooreFund,” as the screen shot below demonstrates. MooreFund also was promoted by Achieve members.
Like Achieve, MooreFund has a presence on well-known Ponzi-scheme forums such as MoneyMakerGroup and TalkGold. The “program” purports to offer four investment plans. These promise absurd daily interest rates of between 1.5 percent and 3 percent, with “compounding” available on three of the four plans and tiered recruitment commissions offered on all four.
Roger Alberto Santamaria Del Cid, an apparent nominee director for offshore companies who is listed as a corporate “subscriber” for VX Gateway in Panamanian business records, is referenced at least three times in the “Panama Papers.”
8TH UPDATE 11:53 P.M. EDT U.S.A. Before we get to the news that a federal judge took only a day to dismiss an April 6 libel lawsuit filed by the MyAdvertisingPays (MAPS) scheme and operator Michael E. Deese against the TaraTalks Blog, we’ll note that the 16-page complaint confirms that MAPS is incorporated in Anguilla.
Let’s begin by encouraging you to read Andrew Ceresney’s opening remarks at a joint symposium today sponsored by the SEC and the University of Illinois at Chicago. (Link at bottom of story. Also see Twitter links.)
BULLETIN: (6th update 7:23 p.m. ET U.S.A.) Class-action lawyers pursuing claims against TelexFree promoters have called the My Advertising Pays (MAPS) “program” a Ponzi scheme and described MAPS promoter Simon Stepsys as a “Ponzi mogul.”
